Starting with the absolute basics, a mortgage is a loan for a house or other piece of property, financed by a bank or other financial institution. If loan is taken out against a property that already has a mortgage on it, it’s referred to as “second charges", with the first loan considered to be the “first charges". These types of loans are “secured", for if the property owner should fail to make the proper payments to the bank on a timely basis, the financial owners (the bank) will take the property as compensation.



While mortgages may indeed be a scary topic, one must remember that shopping for one shouldn’t be. The Internet has made the globe a much smaller place, including the world of mortgages and other secured loans. Long gone are the days of having to carry personal paperwork from the last 5 years down to the local branch of your bank. For a few clicks of the mouse, a quick chat on the telephone, and maybe the hum of a fax machine once or twice can bring the mortgage industry directly into your home.

First things first, the terms of the mortgage can vary greatly among lenders, no matter what your credit rating is or how much money you make in a year. The amount borrowed is repaid on a monthly basis for an amount of time arranged before the loan was signed. Most first and second charges will spread out payments for between 3 and 25 years.

The APR, or Annual Percentage Rate, is the amount of money charged to the borrower from the lender for granting the loan. These rates will vary greatly, depending on the borrower’s credit history, the loan amount, and the value of the property for which the loan is made. The higher the APR, the higher the monthly mortgage payment will be.

Any mortgage, whether it has been generated over the Internet or not, is subject to certain laws. For example, the Consumer Credit Act of 1974 regulates all loans written for under $25,000. Before a regulated secured loan is written, everyone involved must sign a legally binding credit agreement. The lender must give the borrower a minimum of 7 days to rescind on the loan and escape any interest and/or fees.

But the most important rule of thumb while shopping online for mortgages is that the world is at your fingertips, so settling for a mediocre program is simply unnecessary. The Internet makes is possible to get a dozen quotes for a mortgage in a small amount of time, especially when you utilize one of the sites dedicated to finding the best mortgage rates and terms for its customers.